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Gold Mining Stocks' Nov 4 Earnings Roster: FNV, KGC & RGLD

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A few gold mining companies are lined up to release their quarterly numbers on Nov 4. Per the Zacks industry classification, the mining industry falls under the broader Basic Materials sector. Per the latest Earnings Trends, the sector is anticipated to log a decline of 17.1% in the third quarter. However, the slump is not restricted to this sector alone as 13 of the 16 Zacks sectors are expected to suffer declines this earnings season — mostly casualties of COVID-19 pandemic. On a positive note, the decline in third-quarter earnings will be less pronounced than 48.8% slump witnessed in the second quarter. This can primarily be attributed to demand recovery in China and rising commodity prices in the third quarter.

Gold has outperformed other major asset classes this year mainly riding on the COVID-19 crisis. The pandemic and its devastating impact on the global economy has impacted investor’s risk appetite thereby boosting safe haven demand for gold. Further, a low interest rate environment, uncertainty over the U.S presidential election and simmering U.S-China tensions fuelled a 25% rally in gold prices so far this year. In fact, gold prices rose to a record high of $2,067.15 per ounce in early August and ended the third-quarter at around $1,900 per ounce. Thus, gold miners’ third-quarter results are expected to reflect benefits of higher gold price.

In the earlier part of the year, metal producers had to suspend production, slow project construction or curb their operations in accordance to government’s mandates to contain the spread of coronavirus. However, majority of the miners have resumed operations in the third quarter. Meanwhile, miners have been committed to cutting operational costs and capital spending, improving operating efficiency within existing mines and paying down debt. These actions might have contributed to margins in the to-be-reported quarter.

Let’s take a look at three gold mining companies that are gearing up to report their quarter numbers on Nov 4.

Franco-Nevada Corporation (FNV - Free Report) is slated to report third-quarter 2020 numbers after the market close. The company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.6%.

FrancoNevada Corporation Price and EPS Surprise

FrancoNevada Corporation Price and EPS Surprise

FrancoNevada Corporation price-eps-surprise | FrancoNevada Corporation Quote

Our proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

The company has an Earnings ESP of +0.14% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Franco-Nevada’s third-quarter results are likely to reflect higher gold prices. However, some of the company’s mining operators had to temporarily suspend operations and curtail production due to the restrictions imposed amid the pandemic. Its worth mentioning that barring Golden Highway, all have resumed operations. Volatile oil prices and lower spending by operators may have weighed on the energy portfolio’s performance in the quarter under review. Nevertheless, the company’s continued focus on lowering costs are expected to have sustained margins.

The Zacks Consensus Estimate for third-quarter earnings is currently pegged at 59 cents, indicating an improvement of 9% from the prior-year quarter. Notably, the estimate has moved up 13% in the past 30 days.

Kinross Gold Corporation (KGC - Free Report) is scheduled to report third-quarter 2020 results after the market close. The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while matching the same in the remaining one. It has a trailing four-quarter earnings surprise of 15.5%, on average.

Kinross Gold Corporation Price and EPS Surprise

Kinross Gold Corporation Price and EPS Surprise

Kinross Gold Corporation price-eps-surprise | Kinross Gold Corporation Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of -0.40% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has been gaining from strong production at three of its largest producing mines — Paracatu, Kupol and Tasiast — delivering the lowest costs, which might have benefited the company’s third-quarter performance. Further, high gold prices may get reflected in the to-be-reported quarter’s top line. (Read more: Kinross to Post Q3 Earnings: What's in the Offing?)

The Zacks Consensus Estimate for Kinross Gold’s third-quarter earnings is currently pegged at 21 cents, suggesting an improvement of 162% from the year-ago quarter. The estimates have been revised upward by 5% over the past 30 days.

Royal Gold, Inc. (RGLD - Free Report) is scheduled to report first-quarter fiscal 2021 results after the market close. The company has beat estimates thrice in the trailing four quarters, while missing in one. It has a trailing four-quarter earnings surprise of 6.3%, on average.

Royal Gold, Inc. Price and EPS Surprise

Royal Gold, Inc. Price and EPS Surprise

Royal Gold, Inc. price-eps-surprise | Royal Gold, Inc. Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

Royal Gold sold 56,000 gold equivalent ounces consisting of 44,000 gold ounces, 474,000 silver ounces and 1,800 tons of copper related to its streaming agreements in the fiscal first quarter. The figure was higher than 51,000 gold equivalent ounces sold during fourth-quarter fiscal 2020. This solid performance and high gold prices might get reflected in the to-be-reported quarter’s results.

The Zacks Consensus Estimate for the first-quarter fiscal 2021 earnings is pegged at 80 cents, reflecting growth of 33% from the prior-year quarter.

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